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How to Choose a Health Insurance for Self-Employed

The U.S. healthcare cost is one of the highest in the world, making health insurance something you can’t be without. The majority of U.S. citizens have health insurance for the same reason. Health insurance is a default for most W-2 employees, as employers usually adjust the insurance amount from salaries. But, when you’re a self-employed individual, sole proprietor, freelancer or independent 1099 contractor, you're the one taking care of your health insurance. And there’s an extensive list of insurance options and organizations you can choose for self-employed health insurance coverage. As a self-employed individual, you have to figure out on your own a health insurance that best suits your needs. There are many options and it's easy to get confused between the large lists of alternatives, policies and rules.

Table of contents

Key Takeaways:undefined...Read more

Do I need health insurance as a self-employed individual?undefined...Read more

How to choose self-employed health insurance?undefined...Read more

What is the best health insurance for self-employed individuals?undefined...Read more

Key Takeaways:

  • There are parameters to consider before choosing a health insurance provider
  • Benefits of health insurance can…

Do I need health insurance as a self-employed individual?

Yes, everyone needs health insurance and so do self-employed individuals. This is primarily because of the ever-rising medical costs in the U.S. As a self-employed individual, there are several benefits of health insurance, like:
  • A health insurance will cover all or part of your medical cost if you have a medical emergency. It's crucial to have it when the average medical bill for a day of hospitalization is upwards of $10,000.
  • You can have peace of mind as illnesses or accidents can send you into a major financial crisis because of your medical bills.
  • A health insurance premium can be used as a qualifying deductible from your taxable income.
Health insurance counts as an income adjustment and can significantly lower your taxable income. It also helps you avoid a higher tax bracket if you are barely making into a higher tax bracket. For instance, let’s say you made $85,000 of self-employment income last year, putting you just barely into the 22% tax bracket. During the year, you spent $7,500 on health insurance and went to school part-time. Being in school makes you potentially eligible for certain tax credits, depending on your taxable income. One huge one is the American Opportunity Tax Credit, available for the first four years of postsecondary school. This credit phases out at $80,000 for single taxpayers. Usually, you’d be out of luck. But subtracting $7,500 for your health insurance, your adjusted gross income becomes $77,500. That means you avoid the phaseout and unlock a $2,500 tax credit. As a result, you also safely avoid the 22% tax bracket. For this reason, most experts recommend that every professional, employee or self-employed individual have comprehensive health insurance. And while you are at it, it also covers all emergency and non-emergency medical costs.
 Do I need health insurance as a self-employed individual?

Quick tip

You should get a self employed health insurance after consideration of your health and financial status.

How to choose self-employed health insurance?

How to choose self-employed health insurance?
Based on your priorities, individual status and needs, you have to select the right kind of insurance company. You can consider these four parameters and see which health insurance provider best suits your needs as a self-employed individual.
When there are multiple types and levels of health insurance, it becomes challenging to choose the right one. There are several parameters that you can consider when choosing the right self-employed insurance:

Convenience:

Network:

Insurance for underserved groups:

Customer service:

What is the best health insurance for self-employed individuals?

We must focus on the best health insurance for a self-employed individual. Based on your individual needs, you can choose the best health insurance from a long list of insurance providers like:
What is the best health insurance for self-employed individuals?
The best self-employed health insurance for the 2022 year from these providers varies from person to person and from profession to profession. Each of these insurance providers has pros and cons, which we will take up in a separate post. But, the important thing is to consider the kind of self-employed insurance you are looking for, which could be Medicaid, Medicare, long-term or short-term.

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What’s FlyFin?

Self-employed health insurance is a critical part of your tax too. And the federal and state taxes are designed in such a manner that promotes health insurance for all U.S. taxpayers. But it can get a bit confusing, so FlyFin caters to the tax needs of freelancers, gig workers, independent contractors and sole proprietors. Anyone can file taxes through FlyFin! FlyFin tracks all your business expenses, including health insurance premiums, using A.I. to find every possible tax deduction. Then, our CPA team files a guaranteed 100% accurate tax return for you – to save you a couple of thousand dollars and a ton of time on your taxes. Download the FlyFin app and have your taxes filed in less than fifteen minutes, saving time and more money on your taxes than last year, guaranteed.
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